UPDATE: Raymond James Upgrades Bloomin' Brands (BLMN) to Strong Buy
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Raymond James analyst Brian Vaccaro upgraded Bloomin' Brands (NASDAQ: BLMN) from Outperform to Strong Buy with a price target of $18.00 (from $14.00).
The analyst comments "We are upgrading shares of BLMN to Strong Buy from Outperform and raising our price target to $18. BLMN shares have lagged the broader recovery in many casual dining stocks (YTD BLMN down 35% vs. most peers down 10-20%, but some positive YTD) and now trade at a significant discount valuation (2021 EV/EBITDA ~6x vs. peers 8-10x range). We attribute the stock's underperformance to investor concerns/lack of visibility on the company's Brazil segment (recall low DD % of EBITDA pre-COVID). Said concerns appear to be overshadowing continued improvement in its U.S. business, led by strong outperformance at the core Outback brand (we believe comps down 7-9% y/y in recent weeks). We also believe Brazil sales continue to improve (re-opening more dining rooms, adding back lunch day-part) which should assuage investor concerns. With comps improving and liquidity concerns shelved, we believe the stock's multiple can recover to pre-COVID ranges, supporting an incrementally attractive risk/reward."
Shares of Bloomin' Brands closed at $14.34 yesterday.
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